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Umpqua Reports First Quarter 2017 Results

Net earnings of $46.0 million, or $0.21 per common share
Quarterly loan and lease growth of $321.0 million, or 7% annualized
Net interest margin of 3.85%, up 2 basis points from the prior quarter

PORTLAND, Ore., April 19, 2017 (GLOBE NEWSWIRE) -- Umpqua Holdings Corporation (NASDAQ:UMPQ) (the “Company”) reported net earnings available to common shareholders of $46.0 million for the first quarter of 2017, compared to $69.2 million for the fourth quarter of 2016 and $47.5 million for the first quarter of 2016. Earnings per diluted common share were $0.21 for the first quarter of 2017, compared to $0.31 for the fourth quarter of 2016 and $0.22 for the first quarter of 2016.

“Despite some of the near-term headwinds we continue to face, I’m pleased with the progress we’ve made so far on the key priorities that we outlined for 2017,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation. “Loans and leases increased by $321 million, or 7% annualized, during the first quarter, reflecting balanced growth across our commercial, consumer, leasing and commercial real-estate portfolios. There’s strong momentum driving this loan growth, and with a slight expansion in the net interest margin and as we head into the seasonally stronger mortgage banking quarters, I feel good about how we’re positioned for the remainder of the year.”

Notable items that impacted the first quarter 2017 financial results included:

  • $7.7 million negative adjustment related to the fair value change of the MSR asset, compared to a gain of $16.5 million in the prior quarter and a loss of $20.6 million in the same period of the prior year.
  • $0.7 million negative adjustment related to the fair value change of the debt capital market swap derivatives, compared to a gain of $4.6 million in the prior quarter and a loss of $1.8 million in the same period of the prior year.
  • $1.0 million in merger-related expenses, compared to $3.2 million in the prior quarter and $3.5 million in the same period of the prior year.
  • $0.5 million of exit or disposal costs, compared to $1.2 million in the prior quarter and $0.3 million in the same period of the prior year.
  • $1.6 million net loss on junior subordinated debentures carried at fair value, consistent with the level in the prior quarter and with the same period of the prior year.

First Quarter 2017 Highlights (compared to prior quarter):

  • Net interest income decreased by $1.1 million, driven by lower accretion of the credit discount recorded on acquired loans and two fewer days in the quarter, partially offset by growth in interest-earning assets and a 2 basis point increase in net interest margin;
  • Provision for loan and lease losses decreased by $1.5 million to $11.7 million, while net charge-offs decreased by $3.5 million to $9.4 million, or 22 basis points of average loans and leases (annualized);
  • Non-interest income decreased by $38.4 million, of which $29.5 million was related to the change in gains or losses associated with the fair value of the mortgage servicing rights ("MSR") asset and debt capital markets swap derivatives. The remainder of the decline was driven primarily by lower revenues from the origination and sale of mortgages;
  • Non-interest expense decreased by $0.8 million, driven primarily by lower mortgage banking and merger-related expenses, partially offset by higher seasonal payroll taxes;
  • Gross loan and lease growth of $321.0 million, or 7% annualized, to $17.8 billion;
  • Deposit growth of $146.3 million, or 3% annualized, to $19.2 billion;
  • Non-performing assets to total assets decreased to 0.24%;
  • Estimated total risk-based capital ratio of 14.4% and estimated Tier 1 common to risk weighted assets ratio of 11.3%; and
  • Declared quarterly cash dividend of $0.16 per common share.

Balance Sheet
Total consolidated assets were $24.9 billion as of March 31, 2017, compared to $24.8 billion as of December 31, 2016 and $23.9 billion as of March 31, 2016. Including secured off-balance sheet lines of credit at the Company, total available liquidity was $9.4 billion as of March 31, 2017, representing 38% of total assets and 49% of total deposits.

Gross loans and leases were $17.8 billion as of March 31, 2017, an increase of $321.0 million, or 7% annualized, from $17.5 billion as of December 31, 2016. This included balanced growth in the Company's commercial, commercial real-estate, leasing & equipment finance and consumer loan portfolios. During the first quarter of 2017, the Company sold $12.5 million of leases and equipment finance loans.

Total deposits were $19.2 billion as of March 31, 2017, an increase of $146.3 million, or 3% annualized, from $19.0 billion as of December 31, 2016. This increase was primarily attributable to growth in non-interest bearing demand and savings accounts, partially offset by a $187 million decrease in public funds, which was attributable to a combination of seasonal fluctuations and targeted run-off.

Net Interest Income
Net interest income was $206.7 million for the first quarter of 2017, a decrease of $1.1 million from the prior quarter. This decrease was primarily attributable to a $1.3 million linked quarter decrease in interest income arising from the accretion of the credit discount recorded on acquired loans and two fewer days in the quarter. These were partially offset by the growth in average interest-earning assets and a higher net interest margin.

The Company’s net interest margin was 3.85% for the first quarter of 2017, up two basis points from 3.83% for the fourth quarter of 2016. The linked quarter increase reflects higher average yields on taxable investments and interest-bearing cash, partially offset by the lower level of accretion of the credit discount recorded on acquired loans.

Credit Quality
Under acquisition accounting, loans (including those considered non-performing) acquired from Sterling were recorded at their estimated fair value, and the related allowance for loan losses was eliminated. As a result, the Company wrote down the value of the loan and lease portfolio acquired from Sterling as of the acquisition date. The credit portion of the fair value mark is not reflected in the reported allowance for loan and lease losses, or its related allowance coverage ratios, but we believe should be considered when comparing the current quarter ratios to similar ratios in periods prior to the acquisition of Sterling.

Loans acquired with significantly deteriorated credit quality are accounted for as purchased credit impaired pools. Accordingly, loans included in the purchased credit impaired pools are not reported as non-performing loans based upon their individual performance status.

During the first quarter of 2017, the Company recorded $6.4 million of accretion related to the Sterling credit discount in interest income, compared to $7.7 million in the prior quarter. As of March 31, 2017, the purchased non-credit impaired loans had approximately $38.5 million of remaining credit discount that will accrete into interest income over the life of the loans, and the purchased credit impaired loan pools had approximately $30.5 million of remaining total discount.

The allowance for loan and lease losses was $136.3 million, or 0.76% of loans and leases, as of March 31, 2017. To provide better comparability to prior periods, on a pro-forma basis, this ratio would have been approximately 1.1% after grossing up the allowance for loan and lease losses and the loans and leases by the amount of the credit discount remaining as of quarter-end. This compares to a pro-forma ratio of approximately 1.2% as of December 31, 2016.

The provision for loan and lease losses was $11.7 million for the first quarter of 2017, a $1.5 million decrease from the prior quarter level, reflecting a lower level of net charge-offs. As of March 31, 2017, non-performing assets represented 0.24% of total assets, down from 0.25% as of December 31, 2016 and from 0.30% as of March 31, 2016.

Non-interest Income
Non-interest income was $60.2 million for the first quarter of 2017, down $38.4 million from the prior quarter, of which $29.5 million was related to the change in gains or losses associated with the fair value of the MSR asset and debt capital markets swap derivatives. The current quarter's non-interest income included negative adjustments of $7.7 million and $0.7 million related to fair value changes of the MSR asset and the debt capital market swap derivatives, respectively, both attributable to the decrease in long-term interest rates during the quarter. This compares to fair value gains of $16.5 million and $4.6 million for the MSR asset and debt capital market swap derivatives, respectively, during the fourth quarter of 2016.

Revenue from the origination and sale of residential mortgages was $24.6 million for the first quarter of 2017, down $7.7 million from the prior quarter. This decrease was driven by a 29% linked quarter decline in for-sale mortgage origination volume, partially offset by a higher home lending gain on sale margin, which increased by 22 basis points to 3.27% for the first quarter of 2017. Of the current quarter’s mortgage production, 67% related to purchase activity, as compared to 63% for the prior quarter and 58% for the same period in the prior year.

Revenue related to the servicing of residential mortgage loans was $9.9 million for the first quarter of 2017, up 3% from the prior quarter, reflecting growth in the residential mortgage loans serviced for others portfolio.

Gain on loan sales decreased by $2.3 million from the prior quarter to $1.8 million, reflecting a lower level of portfolio loans sales compared to the prior quarter.

Non-interest Expense
Non-interest expense was $182.7 million for the first quarter of 2017, down $0.8 million from the prior quarter level. Mortgage banking expenses decreased by $2.6 million from the prior quarter level, consistent with the lower level of mortgage originations. Merger-related expenses also decreased by $2.2 million from the prior quarter. These decreases were partially offset by $4.3 million in higher seasonal payroll taxes.

Capital
As of March 31, 2017, the Company’s book value per share increased to $17.84, from $17.79 in the prior quarter, and its tangible book value per common share1 increased to $9.57, from $9.50 in the prior quarter.

The Company’s estimated total risk-based capital ratio was 14.4% and its estimated Tier 1 common to risk weighted assets ratio was 11.3% as of March 31, 2017. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of March 31, 2017 are estimates, pending completion and filing of the Company’s regulatory reports.

1 "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. The Company believes that these non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this document are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.

Management believes tangible common equity and the tangible common equity ratio are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability to absorb potential losses. Tangible common equity is calculated as total shareholders' equity less goodwill and other intangible assets, net (excluding MSRs). Tangible assets are total assets less goodwill and other intangible assets, net (excluding MSRs). The tangible common equity ratio is calculated as tangible common shareholders’ equity divided by tangible assets.

The following table provides reconciliations of ending shareholders’ equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).

(In thousands, except per share data) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016
Total shareholders' equity $3,931,150 $3,916,795 $3,920,208 $3,902,158 $3,878,630
Subtract:
Goodwill 1,787,651 1,787,651 1,787,651 1,787,651 1,787,651
Other intangible assets, net 35,197 36,886 38,753 40,620 42,948
Tangible common shareholders' equity $2,108,302 $2,092,258 $2,093,804 $2,073,887 $2,048,031
Total assets $24,861,458 $24,813,119 $24,744,214 $24,132,507 $23,935,686
Subtract:
Goodwill 1,787,651 1,787,651 1,787,651 1,787,651 1,787,651
Other intangible assets, net 35,197 36,886 38,753 40,620 42,948
Tangible assets $23,038,610 $22,988,582 $22,917,810 $22,304,236 $22,105,087
Common shares outstanding at period end 220,349 220,177 220,207 220,482 220,171
Common equity ratio 15.81% 15.79% 15.84% 16.17% 16.20%
Tangible common equity ratio 9.15% 9.10% 9.14% 9.30% 9.26%
Book value per common share $17.84 $17.79 $17.80 $17.70 $17.62
Tangible book value per common share $9.57 $9.50 $9.51 $9.41 $9.30

About Umpqua Holdings Corporation
Umpqua Holdings Corporation (NASDAQ:UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative customer experience, and distinctive banking solutions. Umpqua Bank has locations across Oregon, Washington, California, Idaho and Nevada. Umpqua Holdings also owns a retail brokerage subsidiary, Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in dedicated offices in Oregon, and Pivotus Ventures, an innovation studio headquartered in Silicon Valley focused on creating key technologies and business models that transform finance and commerce. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit https://www.umpquabank.com/ask-us/investor-relations/.

Earnings Conference Call Information
The Company will host its first quarter 2017 earnings conference call on Thursday, April 20, 2017, at 10:00 a.m. PDT (1:00 p.m. EDT). During the call, the Company will provide an update on recent activities and discuss its first quarter 2017 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (877) 675-4756 ten minutes prior to the start time and enter conference ID: 1062181. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 1062181. The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at https://www.umpquabank.com/ask-us/investor-relations/.

Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. In this press release we make forward-looking statements about credit discount accretion related to loans acquired from Sterling Financial Corporation, loan and lease growth, and trends in the loan portfolio mix. Risks that could cause results to differ from forward-looking statements we make are set forth in our filings with the SEC and include, without limitation, prolonged low interest rate environment; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; lack of strategic growth opportunities or our failure to execute on those opportunities; our inability to effectively manage problem credits; our inability to successfully implement efficiency initiatives; our ability to successfully develop and market new products and technology; and changes in laws or regulations.

Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
Quarter Ended % Change
(In thousands, except per share data) Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Jun 30,
2016
Mar 31,
2016
Seq.
Quarter
Year
over
Year
Interest income:
Loans and leases $205,996 $209,812 $212,037 $210,290 $217,928 (2)% (5)%
Interest and dividends on investments:
Taxable 13,931 10,630 10,779 11,963 13,055 31% 7%
Exempt from federal income tax 2,242 2,229 2,181 2,183 2,235 1% 0%
Dividends 388 336 332 365 366 15% 6%
Temporary investments & interest bearing deposits 1,557 1,696 1,090 652 480 (8)% 224%
Total interest income 224,114 224,703 226,419 225,453 234,064 0% (4)%
Interest expense:
Deposits 9,648 9,288 8,999 8,540 8,413 4% 15%
Repurchase agreements 30 32 32 32 36 (6)% (17)%
Term debt 3,510 3,413 3,558 3,848 4,186 3% (16)%
Junior subordinated debentures 4,201 4,174 3,938 3,835 3,727 1% 13%
Total interest expense 17,389 16,907 16,527 16,255 16,362 3% 6%
Net interest income 206,725 207,796 209,892 209,198 217,702 (1)% (5)%
Provision for loan and lease losses 11,672 13,171 13,091 10,589 4,823 (11)% 142%
Non-interest income:
Service charges on deposits 14,729 15,323 15,762 15,667 14,516 (4)% 1%
Brokerage revenue 4,122 4,230 4,129 4,580 4,094 (3)% 1%
Residential mortgage banking revenue, net 26,834 58,448 47,206 36,783 15,426 (54)% 74%
(Loss) gain on investment securities, net (2) 162 696 nm (100)%
Gain on loan sales 1,754 4,060 1,285 5,640 2,371 (57)% (26)%
Loss on junior subordinated debentures carried at fair value (1,555) (1,589) (1,590) (1,572) (1,572) (2)% (1)%
BOLI income 2,069 2,107 2,116 2,152 2,139 (2)% (3)%
Other income 12,274 16,041 11,802 11,247 8,281 (23)% 48%
Total non-interest income 60,225 98,620 80,710 74,659 45,951 (39)% 31%
Non-interest expense:
Salaries and employee benefits 106,473 105,406 105,341 107,545 106,538 1% 0%
Occupancy and equipment, net 38,673 37,618 38,181 37,850 38,295 3% 1%
Intangible amortization 1,689 1,867 1,867 2,328 2,560 (10)% (34)%
FDIC assessments 4,087 3,985 4,109 3,693 3,721 3% 10%
Loss (gain) on other real estate owned, net 82 (197) (14) (1,457) 1,389 (142)% (94)%
Merger related expenses 1,020 3,218 2,011 6,634 3,450 (68)% (70)%
Goodwill impairment 142 0% nm
Other expense 30,690 31,571 29,692 31,918 27,894 (3)% 10%
Total non-interest expense 182,714 183,468 181,187 188,511 183,989 0% (1)%
Income before provision for income taxes 72,564 109,777 96,324 84,757 74,841 (34)% (3)%
Provision for income taxes 26,561 40,502 34,515 30,470 27,272 (34)% (3)%
Net income 46,003 69,275 61,809 54,287 47,569 (34)% (3)%
Dividends and undistributed earnings allocated to participating securities 12 33 31 32 29 (64)% (59)%
Net earnings available to common shareholders $45,991 $69,242 $61,778 $54,255 $47,540 (34)% (3)%
Weighted average basic shares outstanding 220,287 220,190 220,291 220,421 220,227 0% 0%
Weighted average diluted shares outstanding 220,779 220,756 220,751 220,907 221,052 0% 0%
Earnings per common share – basic $0.21 $0.31 $0.28 $0.25 $0.22 (32)% (5)%
Earnings per common share – diluted $0.21 $0.31 $0.28 $0.25 $0.22 (32)% (5)%
nm = not meaningful


Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)
% Change
(In thousands, except per share data) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Seq.
Quarter
Year
over
Year
Assets:
Cash and due from banks $262,655 $331,994 $364,013 $369,535 $299,871 (21)% (12)%
Interest bearing cash and temporary investments 421,991 1,117,438 1,102,428 535,828 613,049 (62)% (31)%
Investment securities:
Trading, at fair value 11,241 10,964 10,866 10,188 9,791 3% 15%
Available for sale, at fair value 3,243,408 2,701,220 2,520,037 2,482,072 2,542,535 20% 28%
Held to maturity, at amortized cost 4,121 4,216 4,302 4,382 4,525 (2)% (9)%
Loans held for sale 372,073 387,318 565,624 552,681 659,264 (4)% (44)%
Loans and leases 17,829,638 17,508,663 17,392,051 17,355,240 16,955,583 2% 5%
Allowance for loan and lease losses (136,292) (133,984) (133,692) (131,042) (130,243) 2% 5%
Loans and leases, net 17,693,346 17,374,679 17,258,359 17,224,198 16,825,340 2% 5%
Restricted equity securities 45,522 45,528 47,537 47,542 47,545 0% (4)%
Premises and equipment, net 293,133 303,882 306,287 312,647 322,822 (4)% (9)%
Goodwill 1,787,651 1,787,651 1,787,651 1,787,651 1,787,651 0% 0%
Other intangible assets, net 35,197 36,886 38,753 40,620 42,948 (5)% (18)%
Residential mortgage servicing rights, at fair value 142,344 142,973 114,446 112,095 117,172 0% 21%
Other real estate owned 6,518 6,738 8,309 16,437 20,411 (3)% (68)%
Bank owned life insurance 301,777 299,673 297,561 295,444 293,703 1% 3%
Deferred tax assets, net 8,464 34,322 27,587 63,038 108,865 (75)% (92)%
Other assets 232,017 227,637 290,454 278,149 240,194 2% (3)%
Total assets $24,861,458 $24,813,119 $24,744,214 $24,132,507 $23,935,686 0% 4%
Liabilities:
Deposits $19,167,293 $19,020,985 $18,918,780 $18,258,474 $18,162,974 1% 6%
Securities sold under agreements to repurchase 304,280 352,948 309,463 360,234 325,203 (14)% (6)%
Term debt 852,308 852,397 902,678 902,999 903,382 0% (6)%
Junior subordinated debentures, at fair value 263,605 262,209 260,114 258,660 256,917 1% 3%
Junior subordinated debentures, at amortized cost 100,851 100,931 101,012 101,093 101,173 0% 0%
Other liabilities 241,971 306,854 331,959 348,889 307,407 (21)% (21)%
Total liabilities 20,930,308 20,896,324 20,824,006 20,230,349 20,057,056 0% 4%
Shareholders' equity:
Common stock 3,516,537 3,515,299 3,514,858 3,517,240 3,518,792 0% 0%
Retained earnings 433,417 422,839 388,678 362,258 343,421 3% 26%
Accumulated other comprehensive (loss) income (18,804) (21,343) 16,672 22,660 16,417 (12)% (215)%
Total shareholders' equity 3,931,150 3,916,795 3,920,208 3,902,158 3,878,630 0% 1%
Total liabilities and shareholders' equity $24,861,458 $24,813,119 $24,744,214 $24,132,507 $23,935,686 0% 4%
Common shares outstanding at period end 220,349 220,177 220,207 220,482 220,171 0% 0%
Book value per common share $17.84 $17.79 $17.80 $17.70 $17.62 0% 1%
Tangible book value per common share $9.57 $9.50 $9.51 $9.41 $9.30 1% 3%
Tangible equity - common $2,108,302 $2,092,258 $2,093,804 $2,073,887 $2,048,031 1% 3%
Tangible common equity to tangible assets 9.15% 9.10% 9.14% 9.30% 9.26% 0.05 (0.11)
nm = not meaningful


Umpqua Holdings Corporation
Loan & Lease Portfolio
(Unaudited)
(Dollars in thousands) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 % Change
Amount Amount Amount Amount Amount Seq.
Quarter
Year
over
Year
Loans & leases:
Commercial real estate:
Non-owner occupied term, net $3,410,914 $3,330,442 $3,280,660 $3,377,464 $3,202,488 2% 7%
Owner occupied term, net 2,584,183 2,599,055 2,573,942 2,581,786 2,714,766 (1)% (5)%
Multifamily, net 2,885,164 2,858,956 2,968,019 3,004,890 2,959,975 1% (3)%
Commercial construction, net 471,007 463,625 388,934 367,879 338,801 2% 39%
Residential development, net 145,479 142,984 127,447 111,941 121,025 2% 20%
Commercial:
Term, net 1,620,311 1,508,780 1,480,173 1,440,704 1,412,816 7% 15%
Lines of credit & other, net 1,114,160 1,116,259 1,142,946 1,116,876 1,036,389 0% 8%
Leases & equipment finance, net 1,000,376 950,588 927,857 884,506 791,798 5% 26%
Residential real estate:
Mortgage, net 2,916,924 2,887,971 2,868,337 2,882,076 2,879,600 1% 1%
Home equity lines & loans, net 1,015,138 1,011,844 1,008,219 989,814 943,254 0% 8%
Consumer & other, net 665,982 638,159 625,517 597,304 554,671 4% 20%
Total, net of deferred fees and costs $17,829,638 $17,508,663 $17,392,051 $17,355,240 $16,955,583 2% 5%
Loan & leases mix:
Commercial real estate:
Non-owner occupied term, net 19% 19% 19% 19% 19%
Owner occupied term, net 14% 15% 15% 15% 16%
Multifamily, net 16% 16% 17% 17% 17%
Commercial construction, net 3% 3% 2% 2% 2%
Residential development, net 1% 1% 1% 1% 1%
Commercial:
Term, net 9% 9% 8% 8% 8%
Lines of credit & other, net 6% 6% 7% 6% 6%
Leases & equipment finance, net 6% 5% 5% 6% 5%
Residential real estate:
Mortgage, net 16% 16% 16% 17% 17%
Home equity lines & loans, net 6% 6% 6% 6% 6%
Consumer & other, net 4% 4% 4% 3% 3%
Total 100% 100% 100% 100% 100%


Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
(Dollars in thousands) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 % Change
Amount Amount Amount Amount Amount Seq.
Quarter
Year
over
Year
Deposits:
Demand, non-interest bearing $6,021,585 $5,861,469 $5,993,793 $5,475,986 $5,460,310 3% 10%
Demand, interest bearing 2,327,226 2,296,532 2,218,782 2,186,164 2,178,446 1% 7%
Money market 6,784,442 6,932,717 6,841,700 6,782,232 6,814,160 (2)% 0%
Savings 1,400,330 1,325,757 1,303,816 1,254,675 1,213,049 6% 15%
Time 2,633,710 2,604,510 2,560,689 2,559,417 2,497,009 1% 5%
Total $19,167,293 $19,020,985 $18,918,780 $18,258,474 $18,162,974 1% 6%
Total core deposits (1) $17,427,832 $17,318,003 $17,257,663 $16,598,065 $16,559,943 1% 5%
Deposit mix:
Demand, non-interest bearing 31% 31% 31% 30% 30%
Demand, interest bearing 12% 12% 12% 12% 12%
Money market 36% 36% 36% 37% 37%
Savings 7% 7% 7% 7% 7%
Time 14% 14% 14% 14% 14%
Total 100% 100% 100% 100% 100%
Number of open accounts:
Demand, non-interest bearing 385,859 384,040 382,687 379,996 375,913
Demand, interest bearing 81,570 82,520 83,501 84,434 85,731
Money market 55,903 56,031 56,128 56,492 56,927
Savings 160,323 159,080 158,760 157,849 156,846
Time 47,365 47,705 47,689 47,850 47,794
Total 731,020 729,376 728,765 726,621 723,211
Average balance per account:
Demand, non-interest bearing $15.6 $15.3 $15.7 $14.4 $14.5
Demand, interest bearing 28.5 27.8 26.6 25.9 25.4
Money market 121.4 123.7 121.9 120.1 119.7
Savings 8.7 8.3 8.2 7.9 7.7
Time 55.6 54.6 53.7 53.5 52.2
Total $26.2 $26.1 $26.0 $25.1 $25.1

(1) Core deposits are defined as total deposits less time deposits greater than $100,000.

Umpqua Holdings Corporation
Credit Quality – Non-performing Assets
(Unaudited)
Quarter Ended % Change
(Dollars in thousands) Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Jun 30,
2016
Mar 31,
2016
Seq.
Quarter
Year over
Year
Non-performing assets:
Loans and leases on non-accrual status $28,915 $27,765 $27,791 $25,136 $30,045 4% (4)%
Loans and leases past due 90+ days & accruing (1) 23,421 28,369 26,189 23,076 22,144 (17)% 6%
Total non-performing loans and leases 52,336 56,134 53,980 48,212 52,189 (7)% 0%
Other real estate owned 6,518 6,738 8,309 16,437 20,411 (3)% (68)%
Total non-performing assets $58,854 $62,872 $62,289 $64,649 $72,600 (6)% (19)%
Performing restructured loans and leases $43,184 $40,667 $36,645 $40,848 $31,409 6% 37%
Loans and leases past due 31-89 days $49,530 $30,425 $39,708 $29,640 $29,054 63% 70%
Loans and leases past due 31-89 days to total loans and leases 0.28% 0.17% 0.23% 0.17% 0.17%
Non-performing loans and leases to total loans and leases (1) 0.29% 0.32% 0.31% 0.28% 0.31%
Non-performing assets to total assets (1) 0.24% 0.25% 0.25% 0.27% 0.30%

(1) Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $5.3 million, $10.9 million, $7.3 million, $11.3 million, and $14.2 million at March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, and March 31, 2016, respectively.

Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
Quarter Ended % Change
(Dollars in thousands) Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Jun 30,
2016
Mar 31,
2016
Seq.
Quarter
Year over
Year
Allowance for loan and lease losses:
Balance beginning of period $133,984 $133,692 $131,042 $130,243 $130,322
Provision for loan and lease losses 11,672 13,171 13,091 10,589 4,823 (11)% 142%
Charge-offs (13,002) (16,303) (13,088) (12,682) (7,850) (20)% 66%
Recoveries 3,638 3,424 2,647 2,892 2,948 6% 23%
Net charge-offs (9,364) (12,879) (10,441) (9,790) (4,902) (27)% 91%
Total allowance for loan and lease losses 136,292 133,984 133,692 131,042 130,243 2% 5%
Reserve for unfunded commitments 3,495 3,611 3,536 3,531 3,482 (3)% 0%
Total allowance for credit losses $139,787 $137,595 $137,228 $134,573 $133,725 2% 5%
Net charge-offs to average loans and leases (annualized) 0.22% 0.29% 0.24% 0.23% 0.12%
Recoveries to gross charge-offs 27.98% 21.00% 20.22% 22.80% 37.55%
Allowance for loan and lease losses to loans and leases 0.76% 0.77% 0.77% 0.76% 0.77%
Allowance for credit losses to loans and leases 0.78% 0.79% 0.79% 0.78% 0.79%


Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
Quarter Ended % Change
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Jun 30,
2016
Mar 31,
2016
Seq.
Quarter
Year
over
Year
Average Rates:
Yield on loans and leases 4.65% 4.70% 4.75% 4.81% 5.07% (0.05) (0.42)
Yield on loans held for sale 3.86% 3.79% 3.79% 3.80% 4.06% 0.07 (0.20)
Yield on taxable investments 2.10% 1.85% 1.96% 2.14% 2.32% 0.25 (0.22)
Yield on tax-exempt investments (1) 4.76% 4.72% 4.68% 4.73% 4.73% 0.04 0.03
Yield on interest bearing cash and temporary investments 0.79% 0.56% 0.50% 0.51% 0.54% 0.23 0.25
Total yield on earning assets (1) 4.18% 4.14% 4.26% 4.39% 4.66% 0.04 (0.48)
Cost of interest bearing deposits 0.30% 0.28% 0.28% 0.27% 0.27% 0.02 0.03
Cost of securities sold under agreements
to repurchase and fed funds purchased 0.04% 0.04% 0.04% 0.04% 0.05% (0.01)
Cost of term debt 1.67% 1.53% 1.57% 1.72% 1.88% 0.14 (0.21)
Cost of junior subordinated debentures 4.70% 4.59% 4.36% 4.30% 4.20% 0.11 0.50
Total cost of interest bearing liabilities 0.48% 0.46% 0.46% 0.46% 0.47% 0.02 0.01
Net interest spread (1) 3.70% 3.68% 3.80% 3.93% 4.19% 0.02 (0.49)
Net interest margin (1) 3.85% 3.83% 3.95% 4.07% 4.34% 0.02 (0.49)
Performance Ratios:
Return on average assets 0.75% 1.11% 1.01% 0.91% 0.82% (0.36) (0.07)
Return on average tangible assets 0.81% 1.20% 1.09% 0.99% 0.89% (0.39) (0.08)
Return on average common equity 4.74% 7.04% 6.28% 5.61% 4.93% (2.30) (0.19)
Return on average tangible common equity 8.83% 13.19% 11.79% 10.59% 9.34% (4.36) (0.51)
Efficiency ratio – Consolidated 68.15% 59.65% 62.11% 66.15% 69.48% 8.50 (1.33)
Efficiency ratio – Bank 65.75% 57.96% 60.45% 64.44% 67.29% 7.79 (1.54)

(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.

Umpqua Holdings Corporation
Average Balances
(Unaudited)
Quarter Ended % Change
(Dollars in thousands) Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Jun 30,
2016
Mar 31,
2016
Seq.
Quarter
Year
over
Year
Temporary investments & interest bearing cash $804,354 $1,194,904 $874,410 $514,881 $356,674 (33)% 126%
Investment securities, taxable 2,723,576 2,373,652 2,265,883 2,304,998 2,311,589 15% 18%
Investment securities, tax-exempt 286,444 287,359 283,818 280,841 287,085 0% 0%
Loans held for sale 351,570 482,028 481,740 403,964 297,732 (27)% 18%
Loans and leases 17,598,314 17,386,385 17,400,657 17,234,220 17,008,084 1% 3%
Total interest earning assets 21,764,258 21,724,328 21,306,508 20,738,904 20,261,164 0% 7%
Goodwill & other intangible assets, net 1,823,799 1,825,491 1,827,405 1,829,407 1,832,046 0% 0%
Total assets 24,730,285 24,740,986 24,422,986 23,896,315 23,415,439 0% 6%
Non-interest bearing demand deposits 5,883,924 5,939,223 5,766,022 5,466,098 5,289,810 (1)% 11%
Interest bearing deposits 13,119,736 13,026,614 12,836,987 12,644,442 12,411,005 1% 6%
Total deposits 19,003,660 18,965,837 18,603,009 18,110,540 17,700,815 0% 7%
Interest bearing liabilities 14,661,558 14,606,120 14,446,687 14,249,349 13,976,678 0% 5%
Shareholders’ equity - common 3,936,340 3,914,624 3,911,323 3,889,593 3,878,540 1% 1%
Tangible common equity (1) 2,112,541 2,089,133 2,083,918 2,060,186 2,046,494 1% 3%

(1) Average tangible common equity is a non-GAAP financial measure. Average tangible common equity is calculated as average common shareholders’ equity less average goodwill and other intangible assets, net (excluding MSRs).

Umpqua Holdings Corporation
Residential Mortgage Banking Activity
(unaudited)
Quarter Ended % Change
(Dollars in thousands) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Seq. Quarter Year over Year
Residential mortgage servicing rights:
Residential mortgage loans serviced for others $14,541,171 $14,327,368 $13,880,660 $13,564,242 $13,304,468 1% 9%
MSR asset, at fair value 142,344 142,973 114,446 112,095 117,172 0% 21%
MSR as % of serviced portfolio 0.98% 1.00% 0.82% 0.83% 0.88%
Residential mortgage banking revenue:
Origination and sale $24,647 $32,386 $45,631 $42,083 $28,409 (24)% (13)%
Servicing 9,858 9,597 9,401 8,640 7,642 3% 29%
Change in fair value of MSR asset (7,671) 16,465 (7,826) (13,940) (20,625) (147)% (63)%
Total $26,834 $58,448 $47,206 $36,783 $15,426 (54)% 74%
Closed loan volume:
Closed loan volume - portfolio $245,334 $250,000 $305,648 $365,926 $332,918 (2)% (26)%
Closed loan volume - for-sale 754,715 1,061,327 1,118,526 1,046,349 764,076 (29)% (1)%
Closed loan volume - total $1,000,049 $1,311,327 $1,424,174 $1,412,275 $1,096,994 (24)% (9)%
Gain on sale margin:
Based on for-sale volume 3.27% 3.05% 4.08% 4.02% 3.72% 0.22 (0.45)


Contacts: Ron Farnsworth EVP/Chief Financial Officer Umpqua Holdings Corporation 503-727-4108 ronfarnsworth@umpquabank.com Bradley Howes SVP/Director of Investor Relations Umpqua Holdings Corporation 503-727-4226 bradhowes@umpquabank.com

Source:Umpqua Holdings Corporation